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Ford Motor Company Notches Double-Digit Sales Gains in 2 Critical Markets, but Slides in the U.S.

It was good to see another huge month for Ford in China, but investors hope the automaker's sales in the U.S. regain their traction in February.

As an investor in Ford Motor Company(NYSE:F), I find it's important to keep up-to-date on the automaker's current events. That has become increasingly difficult in the hectic automotive industry, which serves up a seemingly unlimited amount of financial sales data, earnings reports, vehicle launches, and more.

When considering Ford's global sales data, keeping track of its gains and losses in its three most critical markets is a good place to start. Here are the highlights from Ford's first month of 2016 in China, Europe, and of course, right here in America.

Ford soars in China Detroit's second-largest automaker recorded an excellent January in China. Ford sold a record 130,832 vehicles, a hefty 36% increase over the prior year's January.

Chart by author. Data source: Ford China press releases.

Note that the change in line color on the chart above indicates Ford switching from reporting wholesale sales to retail sales. While the retail numbers will be a slightly lower number than wholesale, it didn't slow Ford down much. The carmaker posted an excellent finish to 2015 and started 2016 on the right foot.

Driving Ford's record January results in China were SUVs, with the Ecosport, Kuga (Escape), Edge, Explorer, and Everest notching more than 37,000 units sold, up 75% from the prior year's January. Ford's passenger cars still dominate total sales, though, and the Escort set a record with nearly 29,000 units sold in January -- a sixfold increase from the prior year's January.

Light at the end of the tunnel China wasn't the only place overseas where Ford managed to increase its sales. For years investors have waited patiently for Ford's operations in Europe to generate a profit, and for years their patience was met with hundreds of millions of dollars in annual losses. Finally, in 2015, Ford broke through and generated an annual profit in the region, with some help from changes in its pension accounting. Ford continues to increase its sales in the region, and an increase in SUVs and a fresh lineup of vehicles should sustain the company's success.

It was Ford's best January in Europe since 2012, with sales reaching 96,900 in its 20 traditional European markets. That was a 10% increase over the prior January result, and fueled a 20-basis-point market share gain to a total of 7.9%.

Similar to the situation in China, Ford's European SUV sales were key drivers of the gains, with the EcoSport and Kuga sales checking in at 50% and 19% higher, respectively. In fact, Ford expects the launch of the new Edge SUV to help drive SUV sales 30% higher in the region during 2016. If that prediction proves true, 2016 will be the first time Ford's annual SUV sales in Europe top 200,000.

One of Ford's core strategies was to continue investing in its European vehicle lineup, even at a time when it was struggling to narrow bottom-line losses. Ford is continuing to implement that strategy, with plans to launch seven new and refreshed vehicles in Europe this year. It's pretty simple: Newer car designs sell better, and generally carry higher transaction prices, so investors should remain optimistic that even better days are ahead for Ford in Europe.

Mixed bag of resultsThe only potential blemish on Ford's January sales numbers came at home in the U.S. market.

It has been difficult for investors to decide how to grade Ford's January sales in the U.S., the market that produces the vast majority of the company's revenue. Total sales dropped 2.6% to 173,723 units, worse than the industry's 0.4% drop overall, and a poor result compared to its Detroit counterparts, Fiat Chrysler Automobiles, which notched a 6.9% gain, and General Motors, which gained 0.5%.

However, Ford didn't do as poorly as Toyota or Volkswagen, which recorded sales declines of 4.7% and 6.9%, respectively, compared to January 2015.

The downside to Ford's sales decline was that it happened during a month when Ford's sales to fleets increased by 20%. That means that Ford's retail sales were much worse than its 2.6% decline in total sales suggests -- retail sales fell by 11% in January. That compares poorly to General Motors' 9% increase in retail sales during the same time period.

On the bright side, sales of SUVs and trucks continue to juice Ford's average transaction price, which was up a staggering $1,800 per vehicle in January -- nearly three times the industry's average gain for the month.

That brings us to our next set of mixed results. Ford's most popular and best-selling vehicle, the F-Series full-size truck, was selling on average for $2,500 more than it was last January -- and, even sweeter, sales incentives for it declined $500. Essentially, each truck driven off dealership lots was really profitable for Ford during January. On the downside, total sales for the F-Series declined by 5% to 51,540 units. While Ford considers any month when it sells more than 50,000 F-Series trucks a solid month, January was still a bit disappointing considering the last few years of results.

Chart by author. Data source: Ford Motor Company press releases.

Also, while the decline in F-Series sales was a bummer, investors should take it with a grain of salt because December was the first month in a decade that Ford sold more than 80,000 F-Series trucks. It's very possible December's holiday deals pulled some demand forward from January, and if you average out the two months it's still a very strong result.

Ultimately, while the U.S. was a mixed bag of results, there's no reason to panic. Investors should be thrilled that Ford continues to increase its sales in Europe, and that China's purchase-tax incentive has been a huge success in fueling sales that had sputtered over the summer.

Author

As a Motley Fool Industrial Specialist, I use my marketing and business background in the automotive industry to evaluate major automakers and other large industrial corporations. Follow me on twitter for tweets about stocks, cars, sports, and anything I find amusing.
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